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    IRS Penalty Letters

The IRS has sent out Penalty Letter 226J - Are You Prepared?

The IRS has begun the enforcement of the Affordable Care Act based on 2015 employer responsibility reporting (1094-C and 1095-C forms). Over $228 billion in penalties has been sent from the IRS for ACA non-compliance.

If your company receives Letter 226J, you have 30 days to respond. The letter will inform you of your potential liability for payment. The IRS has released an official sample of the letter https://www.irs.gov/pub/notices/ltr226j.pdf. The general procedures the IRS will use to assess the employer shared-responsibility payment are described in the letter.

The IRS has issued letter 226J to Applicable Large Employers (ALE) if it determines that, for at least one month in the year, one or more of the ALE’s full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed (and the ALE did not qualify for an affordability safe harbor or other relief for the employee). To learn more, download our IRS Letter Guide: